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Vladimir Putin held a meeting on topical issues of the Lake Baikal conservation and environmental development of the Baikal natural area.

Russian President Vladimir Putin.

Excerpts from the transcript of the meeting on the development of the Baikal natural area.

President of Russia Vladimir Putin:

Good afternoon, colleagues,

Today we will discuss the issue that we have addressed multiple times, which, however, does not diminish its relevance. We will discuss Baikal and the environmental development of the Baikal nature area.

This territory is, without any doubt, unique, and we all know it very well. It is not only the legacy of our country but, without any exaggeration, the legacy of the entire planet.

Baikal is our pride and a great responsibility. Its conservation for the present and future generations is unquestionably a state priority.

Cleaning up the aftermath of irrational and often irresponsible economic activity in these areas requires particular attention – first, to prevent anything similar from happening in the future, and second, to minimize the accumulated effect.

All this requires our close attention and, of course, substantial financial resources.

Meeting on development of Baikal natural area.

Large parts of the Baikal area have been extremely contaminated. Even now that the Baikal pulp and paper mill and the Dzhidinsky tungsten and molybdenum plant have been closed for several years, the accumulated waste continues to pollute the water in the lake and the rivers flowing into it.

The first task that requires immediate action is to eliminate the environmental damage and to carry out full reclamation of the contaminated areas. Please determine the sources of funding, plans and responsible parties.

In addition, it is necessary to look into the facilities that continue operation. Most of them have worn-out waste treatment facilities and the housing and utilities infrastructure accounts for over 60 percent of the contaminated discharge. Unfortunately, we have to mention the local agricultural facilities as well. After all, one way or another, agricultural chemical waste makes its way into Baikal and local rivers.

We must reduce the amount of untreated water discharged into the lake, there is no question about it. This brings us to the second task, which is to upgrade the utilities infrastructure, fast and in a quality manner. It is the regions’ responsibility, and they can rely on the federal government’s effective support, including the federal targeted program, Protection of Lake Baikal and Socioeconomic Development of the Baikal Natural Area in 2012–2020.

Dozens of wastewater facilities and solid household waste landfills have been built under the program. Consistent measures are being taken against wildfires and poaching. The program contributes to preservation of the local ecosystem, rare animals and plants. Over 2012–2016, more than 10 billion rubles were allocated – although I should add that the plan was to provide even more.

I believe it is necessary to consider extending the program and particularly focus on the spending efficiency and priority expenses.

The third task is to ensure environmental development of the Baikal natural area in general. Above all, this means a harmonious, rational balance between socioeconomic development, socioeconomic interest and wildlife conservation. Relatively speaking, this problem is very acute in all civilized countries and there are many good and not so good examples of how this problem is resolved.

Baikal’s special status places greater demands on any economic activity, which often results in clearly excessive restrictions and we must not forget about this. These restrictions may directly affect the quality of life and the development of local residential areas, hold back businesses and, therefore, the creation of jobs and revenues to the local budgets.

Let's discuss all the factors associated with the special regime of the lake’s protection, and together we will determine the best solutions to the problems of environmental and socioeconomic development of the Baikal area. At the same time, it is of fundamental importance to prevent an increase in the man-induced impact on the Baikal ecosystem.

This certainly applies to the tourism industry. We have just discussed this with the region’s Governor. Of course, this is a very promising branch of the regional economy – it is interesting and generates revenue and creates jobs. Russian and foreign tourists’ interest in Baikal is constantly growing. Up to a million people visit Lake Baikal every year. But there is a reverse side of this generally positive factor: it brings new problems.

The lack of control over backpacking and camping leads to spontaneous landfills on the shore and debris in the water bodies. As for travel agents, their desire to take advantage of the growing demand for Baikal travel often prods them to ignore environmental requirements.

These issues certainly need to be dealt with closely. We need to stimulate businesses’ environmental responsibility, for example work out arrangements for co-financing of environmental projects. Special attention should be paid to the development of tight control systems.

In this connection, I ask the Prosecutor General’s Office to check the Baikal area for cases of illegal and environmentally harmful activities. I would like to emphasize this: you do not have to check everything, one must certainly know when to stop, but to spot illegal and environmentally harmful activity. And to take appropriate action.

A key role here is assigned to inspectors of specially protected natural areas. Mr. Vasily Sutula [director of the Baikal State Nature Biosphere Reserve] has just told us how people work – not only people in the civil service, but also volunteers, for which they are especially thankful.

They must have sufficient resources for their work. I am not only talking about administrative support, but also about good compensation, necessary equipment, gear, and so on.

Let's look at all these issues together.

Vladimir Putin at a meeting on development of Baikal natural area.

We need to consult the Finance Ministry. I will not say anything new here: there are all sorts of ideas, such as channeling part of the collected fines and charges directly to the nature reserves and national parks and using these funds to improve their development and protection.

Here I would like to draw your attention to our location. The Baikal Reserve visitor center is a very good example of combining the tasks of protecting natural areas and developing civilized eco-tourism. This experience should be widely disseminated and popularized, also as part of the Year of the Environment project underway in Russia, as you must know.

The visitor center employees are real professionals and sincerely dedicated people, and I would like to thank you again, Mr. Sutula, and all your colleagues.

Let's move on to the discussion.

And now let us hear from Minister of Natural Resources and Environment Sergei Donskoy. Mr. Donskoy, you have the floor.

Minister of Natural Resources and Environment Sergei Donskoy:

Mr. President, colleagues,

Let me briefly speak on the environmental situation at the Lake Baikal UNESCO World Heritage Site.

In general terms, I should say that the environmental situation in the region has stabilized after the closing of the Baikal pulp and paper plant. In particular, air emissions in the Baikal natural area have fallen by 15 percent during the last four years and more than twice in the central environmental zone. Sewage discharges into the lake have gone down by more than 80 percent.

But at the moment, a number of issues you mentioned still remain; in particular, lake contamination with liquid and solid utility waste. There is also the problem of cumulative environmental damage, including the pulp and paper plant’s industrial site, which I will speak about later.

So, the priorities of our activity within the framework of Lake Baikal protection and the environmental development of the area are cleaning up cumulative environmental damage, effective waste disposal and reducing sewage contamination of the lake. It is also important to ensure forest preservation, wildlife conservation and development of special protection areas.

The main environmental development tool is the Protection of Lake Baikal and Socioeconomic Development of the Baikal Natural Area federal targeted program, adopted in 2012. At the moment, the total financing of this program in 2012–2020 is around 26 billion rubles. It was 58 billion rubles at first, so it was cut by more than half. Taking that into account, we are now revising our project based on our priorities.

(The Minister gave a detailed account of the efforts to clean up cumulative environmental damage. He said that one of the federal targeted program’s tasks is to close eight facilities most dangerous for Baikal. Work is in progress at three of them and has begun at five others. It will result in cleaning up over 2,000 ha of land and reducing the volume of waste contaminating the environment to 1,500 tons. Sewage treatment plants are under construction. Sergei Donskoy also informed the President about the development of the unified local waste management plan.)

Implementing the unified local waste management plan will probably become a part of the federal targeted program. Now the document stipulates establishing 20 disposal sites in the Republic of Buryatia and 11 disposal sites in the Irkutsk Region. At the moment, two facilities are completed in Buryatia and one is still under construction. One facility is completed and one under construction in the Irkutsk Region.

President Putin at a meeting on development of Baikal natural area.

But there should be a public hearing on the waste management plan. The draft law stipulating that such a procedure should be mandatory across the country has been designed and introduced to the Government. We are planning to adopt it during the autumn session.

Also, an effective tool to combat illegal dumps – the Our Nature system of electronic public oversight – was launched in Baikal. The main purpose of these innovations is to involve people in the detection and prevention of violations in the field of environmental protection. Today, there is a public inquiry for this. You could learn this from the volunteers you met with today.

As for forests. The main goal is to ensure forest conservation and regeneration. Over the past two years, the volume of forest regeneration has increased by 1.5 times up to 41,000 hectares. But we think that the volume should at least double.

One of the constraints today is the lack of quality planting material. In this regard, we plan to implement a project for the construction of forest seed production centers as part of a public-private partnership, which can provide up to 10 million seedlings a year. This will allow us to step up work on forest restoration.

An additional factor should be the adoption this year of a law on compensatory forest restoration this autumn. The following rule will be introduced: if you cut down a certain number of trees, you must plant the same number. This refers to all sites.

In addition, today there is a legislative ban on sanitation tree cutting in the burnt areas of the central environmental zone of Lake Baikal, so we have drafted an appropriate bill; it has been coordinated and will be submitted to the Government in the near future.

All bills, as I said, should be approved in the autumn session. To this end, we are working with the State Duma now: it is ready to adopt everything this year.

We also made changes to the principle of distributing forest subventions, including an increase in funding for the regions of Siberia and the Far East in 2018, focusing on financing both forest restoration and other activities in the forestry sector, including an increase in spending for the Baikal Region by 20 percent.

I hate to say it, but poaching is still one of the main risks for the biological diversity of Lake Baikal.

(The Minister goes on to briefly mention the measures on which it was decided to concentrate.)

Draft laws have already been prepared, and we think they may be adopted in the autumn session.

To illustrate the effect of poaching, I will give the example of the Baikal omul population decline. Today we released omul fry and spoke with our colleagues. They said the omul population has decreased practically four times in the past decade. Now the spawning population is two times smaller than the average figures for many previous years. It is necessary to release more omul fry. The federal targeted program provides for the reconstruction of three outdated fish factories of the Federal Agency for Fishery, which will also allow us to release more omul.

However, a ban on fishing and an increase in artificial reproduction may produce no results. We believe it will be difficult to achieve results if the current level of poaching and uncontrolled sale of illegal products, including caviar, stays the same. Therefore, the region should establish a system of supervision over the omul turnover. This is also one of the key tasks.

A few words about Baikal protected natural areas. You have already been told today that this is the place where the first nature reserve was created a hundred years ago. We will celebrate this anniversary this year. Practically one-tenth of all federal protected natural areas are located within the Baikal natural area, and it is clear why.

The recreation potential of national parks is particularly important for Baikal because parks form the main trend for regulated, eco-responsible and educational tourism. We think its development will have a multiplying effect by creating additional jobs, which will also work as an anti-poaching measure.

By the way, this is why we launched the Year of the Environment and specially protected natural areas by opening the unique visitor center where we are now.

If we are talking in the scope of the entire country, this year the Government has adopted the Russia’s Wildlife: Protect and Appreciate priority project. It concentrates all the main ecotourism development areas, including ecotourism at Lake Baikal.

These programs’ implementation will use the public-private partnership mechanism, involving operators with international experience in carrying out complex development projects.

We believe that Baikal’s recreation potential – we have already talked about it – is measured in millions of tourists per year, with us ensuring strict compliance with the environmental restrictions. This is what the priority project envisages.

In conclusion, I would like to say that we should continue intense work on all our priority areas of activity. We understand that Baikal’s value is timeless, and we should do everything to preserve it for our future generations.

The main results of the measures and the area of activity we are planning to implement under the federal targeted program are listed on the slide, so I will not go through them.

One of the key elements of what we would also like to ask for is to reinstate the original financing of the federal targeted program, because it is an important tool necessary to implement all the measures planned in the Baikal natural area, as well as to extend it until 2030. Of course, there is much work to do, and now it is effective until 2020, a short term. We need additional time to implement all these projects. I ask for your support.

Thank you.

<…>

World Wildlife Fund (WWF Russia) Director Igor Chestin:

Of course, here at Baikal we cannot but remember that this is where our nature conservation efforts started, in the Barguzinsky Nature Reserve, 100 years ago. This year Russia marks the 100th anniversary of its nature reserve system. Perhaps this is the main topic I would like to address.

Mr. President, in 2014, you issued instructions to the Government to adopt a federal law toughening the legal regulation of state nature reserves and national parks, including the ban on seizing land plots and forest areas located within protected natural areas and ban on changing their designated purpose.

I have to inform you that, unfortunately, these instructions have not been fulfilled. Moreover, in 2016, a federal law was passed that allows construction at the so-called allocated biosphere grounds in the national reserves. This decision has not been put in practice anywhere so far but, unfortunately, the law provides an opportunity for such construction. My understanding is that it has something to do with different ideas about tourism, which I think anyone involved in nature conservation sees as a generally useful and beneficial activity.

However, there are different types of tourism. For some, tourism means camping, backpacking and wildlife. For others, it is a five-star resort with a swimming pool, spa and so on. Perhaps, it is time we put an end to this misunderstanding and misinterpretation and determine which forms of tourism are permitted in which areas.

If we speak about nature reserves, I believe the only kind of tourism possible here is educational tourism that does not require any changes to the territory, deforestation for further construction of linear facilities such as roads and power lines; tourism that does not require major construction projects. There could be hotels around the protected natural areas with daily tours. Or hiking, horseback and kayak itineraries for some enthusiasts, with minimum impact on the ecosystem.

National parks are a different story. We know that, for example, Sochi National Park attracts a million visitors every year. There are cultural heritage sites, hotels and historically, the situation there is completely different. But for nature reserves what I said is, I think, the only possible and acceptable kind of tourism. And this must be regulated by the law.

A draft law pursuant to your instructions I have just mentioned was indeed developed and it does solve many of issues raised today. The draft law allows qualifying a limited number of nature reserves as national parks because they do not meet the criteria of nature reserves. For example, Teberdinsky Nature Reserve with Dombai in the center or the Stolby Nature Reserve in Krasnoyarsk Territory, which gets 300,000 visitors per year. The national park mode of operation suits these territories better.

The draft law also resolves the issue of allocating residential areas, which the representatives of the regions mentioned today. It is good that this very sensitive issue is discussed because for protected natural areas it would be highly irregular to deal with the local residents’ problems. But why on Earth should we restrict residents’ rights? They were born there and lived there all their lives. Suddenly this burden is imposed without them getting anything in return. It is not a good approach to turn the local population against the system of protected natural areas.

Vladimir Putin visited the Baikal State Nature Biosphere Reserve.

Vladimir Putin took part in a ceremony releasing Baikal omul fry into Lake Baikal.

Russian President took part in a ceremony releasing Baikal omul fry into Lake Baikal. Around 50,000 hatchlings were cultivated in hatcheries using industrial fishing methods in order to maintain the biodiversity of the fish fauna in the world’s deepest lake. The stocking of Baikal with fish is carried out regularly based on the public-private partnership.

Russian President also stopped at the Baikal Zapovedny visitor center, a modern information and tourism complex built on the lake. Vladimir Putin viewed the center’s exhibits and briefly spoke with volunteers of the Great Baikal Trail inter-regional public organization.

PHOTO:

Vladimir Putin before the ceremony of releasing Baikal omul fry into Lake Baikal.

Vladimir Putin at the ceremony of releasing Baikal omul fry into Lake Baikal.

Exhibition at the Baikal Zapovedny visitor center.

Vladimir Putin with volunteers of the Great Baikal Trail inter-regional public organization at the Baikal Zapovedny visitor center.

Sergey Donskoy briefed Russian President on measures to enhance the efficiency of subsoil resource use, develop a system of protected natural zones, and support eco-tourism.

Russian President Vladimir Putin at a meeting with Natural Resources and Environment Minister Sergei Donskoy.

President of Russia Vladimir Putin:

Mr. Donskoy, we discussed with you on many occasions the question of effective subsoil use. I know the Ministry has prepared a range of instruments, including work with licences. Let us talk about this now.

Natural Resources and Environment Minister Sergei Donskoy:

Yes, Mr. President.

Let me begin by saying that a new system for subsoil resource use began taking shape 25 years ago, with the adoption of the law on subsoil resources. Over this time, practically all of the discovered deposits have been distributed among subsoil users. The share of unallocated subsoil resources is 3 percent for diamonds, for example, around 5 percent for natural gas, 6 percent for oil, and 6.9–7 percent for copper. Today, we are shifting our focus from subsoil resource distribution to ensuring that resources are used effectively.

Let me brief you on what we have done over this time to resolve this task. Firstly, we have modernised and essentially put in place a new system of preparing and approving detailed engineering plans, in order to rationalise subsoil resource use. We have introduced a new classification for oil and gas, which conforms to the framework classification used by the UN. We signed the relevant document harmonising these two classification systems with the UN last autumn. We have set new rules for processing geological data, making it more accessible and rapidly updated. Acting on your instructions, we have updated licences, as I briefed you at an earlier meeting. We have now completed this one-off updating. We have covered 5,326 licences, of which 70 percent were updated, while the holders of the remaining 30 percent did not go ahead with updating, for various reasons. Those 30 percent are now under our special supervision.

I would also like to note that this updating enabled us to include in the licences clearer obligations that make monitoring more effective. Practically all licences now set deadlines for carrying out geological exploration, providing geological data, and much more.

Vladimir Putin:

These obligations have become more specific.

Sergey Donskoy:

Yes, more specific and clearer, and this means we can now continue our work to improve the supervision of subsoil resource use.

At the same time, we passed several laws that made it possible to provide subsoil resource deposits to resource users for geological exploration on declarative basis. When investment in geological exploration was falling all around the world (we estimate that it fell around 2.8-fold in the world), it stabilised here, and this is important, and we believe that the measures we took contributed to this. Investment coming in through this new system now comes to around 28 billion, which is comparable to state financing.

The time allowed for geological exploration has also been increased. In remote and difficult zones where more time is needed for exploration, we have made this possible. The timeframe has increased by 40 percent, from 5 to 7 years, on land, and exploration can now take up to 10 years offshore.

We have introduced economic incentives, particularly through eliminating excess costs and administrative barriers. We give users the possibility to correct technical mistakes in licences and change the boundaries of their licenced sections. The state expert evaluation of planned wells, which duplicated work already done, has been abolished. Extraction of associated components is now allowed (only for state companies for now, but as we pick up the pace in this work, we plan to extend it to a broader range of companies). It is also possible now to use land plots and forest tracts for subsoil resource use purposes.

Overall, we think that these measures have made it possible to make this work independent of external challenges, and recent years confirm this.

Now, we have completed the improvement work and have cleansed the stock of licences of outdated obligations that were either generally obsolete or do not meet current demands, and we think that the conditions are now in place for a better performing sector. To achieve this, we first need to bring order to subsoil resource use through stricter supervision. If necessary, we are looking at the possibility of revoking the licences of subsoil resource users that fail to comply with the requirements. As I said, the licences now set out clear requirements. In other words, the decision-making process is clearer now.

Then there is the system of economic incentives. What does this involve? Last year, we decided and introduced legal provisions making it possible to deduct geological exploration costs from profit tax, taking into account the mark-up factor. This provision applies only to offshore exploration currently, but we believe it could be used on land as well, particularly in the regions we want to stimulate (this mechanism is widely used in the world and we are in talks with the Finance Ministry now).

In other words, this mechanism could be put to use in areas we want to develop. However, we want to develop another type of mechanism here. Currently, resource users pay rentals, payment for the area in which they are carrying out geological exploration. We want to raise these payments for resource users who do not perform the work and comply with geological exploration timeframes. In this way we would like to encourage them to keep to the deadlines and requirements set out in their licences and to give them motivation to do so.

We are also looking at the possibility of developing new exploration and production technologies at technological test sites. We hope to pass a law this year making it possible to develop technological test sites in various places, tailoring them for use with different types of hard-to-access resources and different types of technology. This draft law is ready now and is going through the approvals process.

Work is also underway on developing new forms of state participation in large exploration projects. In particular, we are putting the emphasis on developing private-public partnerships in this area.

This is the general picture regarding what we have done to improve effectiveness in this area.

Vladimir Putin:

How long have you been working on these measures?

Sergey Donskoy:

We began active work in 2012. Many people worked on the new classification system. The old one dated from 1983 and did not meet today’s requirements. We have gone over to the new system, which makes it possible to take economic factors into account, as well as many new approaches and technological change. This work began in 2005 and was very substantial, but the active phase started in 2012 and is now completed. We also had international experts involved, so that we could examine the international aspects of our national classification and ensure the necessary degree of consistency.

Vladimir Putin:

What are the legal areas in need of bolstering in your opinion?

Sergei Donskoy:

We need to focus on economic incentives for geological exploration today, to have the targeted instruments we need for use in new zones where we plan to develop geological exploration and make new discoveries. This is our priority. We also need to motivate resource users to comply with the rules and obligations set out in their licences. We believe this is one of the key tasks now if we want these licences to work effectively, in terms of revenue for resource users, but also, above all, in terms of the development effect for the country. This creates a good basis for regional development, after all.

Vladimir Putin:

You set this all out in the licences themselves, but what interests me is your opinion regarding the need for additional measures to strengthen the legal base, perhaps government regulations, additions to the legal base. Do you see a need for any additional measures here?

Sergei Donskoy:

The first point I mentioned does require legal amendments. Measures to stimulate development of hard-to-access deposits will also require legal amendments, and so will the development of test sites to which we can attract companies looking to develop innovative technology, small and medium business working on innovations that big companies will later use in their work as well.

As for the private-public partnership plans, it could be possible here to develop junior business and to offer incentives to small companies working at the earlier stages and implementing their geological exploration ideas. Then there is the creation of public-private stimulation funds.

Vladimir Putin:

How soon do you think this will be done?

Sergey Donskoy:

Everything is at the approvals stage at the moment. We hope to introduce these additional measures this year, after amending the law.

Vladimir Putin:

When do you plan to submit the draft law to the Duma?

Sergei Donskoy:

We hope to submit these new proposals in autumn and have them passed.

Vladimir Putin:

Good, thank you.

You also wanted to speak about the protected nature zones.

Sergei Donskoi:

Yes, we have a particular situation this year. In accordance with your executive orders, we are working on measures to mark the Year of the Environment and the Year of Protected Nature Zones. The existence of these protected zones in Russia marks its 100th anniversary this year. In 1917, tsarist Russia established the first such zone, the Barguzinsky Reserve, to restore the sable population.

Vladimir Putin:

In 1917?

Sergey Donskoi:

Yes, 1917 according to the modern calendar, but it was December 1916 by the old calendar. If we take into account the calendar change though, the anniversary falls on January 2017. We have already carried out the first activity planned to mark this centenary, at the Baikal Reserve, where we have opened a visitors’ centre, one of the best such centres yet established, and we invite everyone to come and see Baikal’s beauty in all its splendour.

Regarding current protected nature zones, we have more than 200 different reserves and national parks today, and we plan to create another 7 this year – both reserves and national parks. Around 10 million hectares of land will become part of the protected zone system. I would like to say here that international experts and our own specialists agree that the protected nature zone system (reserves and national parks) is one of the best forms of preserving territories that are home to between 50 and 80 percent of rare animal species, and could be subject to human impact.

Last autumn, you visited the Orenburg Reserve, where we are carrying out a project to reintroduce the Przhevalsky horse. We brought a dozen horses from Hungary last autumn. This September, we will bring another 10 horses from Hungary. We are thus developing this project and will have a solid core of Przhevalsky horses for taking it further. This summer, we also plan to launch projects to develop eco-tourism and invite people to come and see the horses in the wild and from there to become familiar with what is a very important, but very fragile sector, I think.

Most important, I would like to stress, is that specialists estimate that our national parks could attract up to 20 million people on eco-tourism routes. We currently host only 2 million people. This year, we are putting the emphasis on building the infrastructure required for the development of eco-tourism in the national parks. We plan to amend the laws and continue these infrastructure development projects.

The most efficient and memorable means of drawing attention to eco-tourism and to our sites and their beauty is to have your support, Mr. President. We propose three sites for your attention – the Russian Arctic in the Franz-Josef Archipelago, the Baikal Reserve, and the Putorana Plateau. These are all beautiful and interesting sites. If you agreed to visit, this would be a visible and big contribution to developing eco-tourism in our protected nature zones.

President Putin:

Thank you. I will certainly do this. We will choose a site and decide on a time when a visit would have the greatest effect.

Vladimir Putin met with Deputy Prime Minister Alexander Khloponin to discuss the Year of the Environment in Russia, including ways to reduce emissions and the adverse impact on the environment, to introduce best available technologies, and to protect rare animals.

Vladimir Putin with Deputy Prime Minister Alexander Khloponin.

President of Russia Vladimir Putin:

Mr. Khloponin, the Year of the Environment is underway in Russia. You were in charge of organising this work as Deputy Prime Minister. What do you think about the activities planned by the Government? What and when do we expect to accomplish as a result of this work?

Deputy Prime Minister Alexander Khloponin:

Mr. President, in accordance with your executive order, the Government approved an action plan as part of the Year of the Environment whereby we will hold 234 events to clean up environmental damage, introduce the best available technologies, and to conserve rare animal populations. This is one area of our focus.

Our major corporations and companies such as Rosneft, Gazprom, EVRAZ and RUSAL, plan to carry out 64 events during the Year of the Environment with a budget of over 100 billion rubles. These measures will reduce emissions and other negative impact on the environment. The emissions will be reduced by almost 70,000 tonnes per year. This is a very good figure.

In total, we plan to spend 347 billion rubles as part of this effort, of which federal funds will account for around 145 billion, regional budgets for about 11 billion, whereas our major private companies will provide the biggest share of financing in the amount of about 190 billion rubles.

The Clean Country project is another area of focus of the Government, which comprises two main activities. The first one is connected with building five pilot plants for thermal treatment of municipal waste. This project covers the Moscow Region and Tatarstan. The Government has already developed incentives using the green tariff in order to implement these projects. We hope this project will be critical and valuable for achieving success. The Moscow Region is home to about 19 million people, and this will be a landmark event, indeed.

The second area concerns reclaiming and cleaning damaged land. This project involves about 20 regions and 25 facilities, including the city of Dzerzhinsk in the Nizhny Novgorod and Chelyabinsk regions and Franz Josef Land. Also, upon your instruction, we will start the clean-up of Lake Baikal this year.

The conservation of animals is a separate project. In accordance with your instruction, we will adopt a corresponding law this year.

Vladimir Putin:

How is the introduction of the best available technology going?

Alexander Khloponin:

Most of our major companies have joined this programme. They should approve projects and programmes for transitioning to the best available technology by 2019 and start implementing them in 2020.

We have some questions regarding a number of companies. Indeed, they are putting together projects, but are saying that they will start implementing technology projects in 2020, 2021 or even 2022. We are focusing on each individual company. For us, it is important to make sure that these are real programmes, not some abstract ideas written on paper.

Vladimir Putin:

I am sure you understand why I asked you this question. Speaking in bureaucratic parlance, business representatives are asking me to push all these plans back. Please make sure that these proposals and requests are treated very carefully, and proper calculations are made.

You also mentioned the protection of rare animals. What’s your opinion of the law enforcement practice? We have adopted the laws toughening punishment for killing animals, especially the ones on the endangered species list. How are things going in reality?

Alexander Khloponin:

We are closely following the legislation, especially with regard to endangered species. To date, the restrictive measures have already brought positive results. We are restoring the populations of rare animals. I am personally involved in a project to restore the population of the Persian leopard. There are projects for the Far Eastern leopard, birds, bison, and several other species. Indeed, we are doing a lot in this regard.

Many non-governmental and charity organisations are involved in restoring populations of rare animals. Today, we are applying harsh measures to unauthorised hunting and killing of these animals. Opinions vary, but I think that the current law-enforcement practice does allow us to increase the populations of these animals.

Vladimir Putin:

People may disagree, there is nothing unusual about it. But there is the law which stipulates punishment for culprits, including criminal liability. It is applied or not?

Alexander Khloponin:

Yes, it is. Of course, the territory is vast, and, perhaps, there are not enough rangers to cover it in full.

Vladimir Putin:

Please assist the Prosecutor General's Office in carrying out an inspection.

Vladimir Putin had a working meeting with Murmansk Region Governor Marina Kovtun, who briefed the President on the region’s socioeconomic situation and large investment and environmental projects.

President of Russia Vladimir Putin:

Good afternoon. Let us take a look at the situation in the region.

Murmansk Region Governor Marina Kovtun:

Mr. President, I would like to start with our performance in 2016 and the current situation in the region.

The results of our socioeconomic performance last year are evidence of economic stability, and some indicators point to positive trends.

We can report industrial production growth for the second year running. 2016 yearend growth will be 2 percent year on year, mostly due to our mining and metals sectors.

Investment in fixed capital has increased 20 percent up to 48.2 billion rubles for the first 10 months of the past year. Corporate revenues have increased 50 percent and freight turnover 12 percent.

According to estimates, our 2016 gross regional product increased by more than 0.4 percent. Industrial production and transportation companies account for almost half of the gross added value and over 60 percent of extra-budgetary investment.

Large industrial companies, which we see as our flagship companies, form the basis of the region’s economic stability. These include the Kola Mining and Metallurgical Company of Norilsk Nickel, PhosAgro’s mining and processing company Apatit, and [Eurochem’s] Kovdorsky GOK mining and processing. Thanks to these companies tax revenue has increased by over 13.5 percent and we have used these funds to reach our priority goals.

One goal was to raise wages in the public sector, which we increased by 6.2 percent on October 1. We have also decreased the Murmansk Region’s sovereign debt and so reduced our debts. According to the federal Ministry of Finance, the Murmansk Region is a region with a high quality of management. We are proud of this evaluation.

We had a deficit-free budget in 2016 and plan to have a minor budget surplus of 70 million rubles in 2017.

We reduced our sovereign debt to 41 percent from 46 percent in 2015 and the commercial part of our sovereign debt from 67 to 53 percent. This year, we will continue working to increase the efficiency of our budgetary spending, that is, the use of budgetary funds.

Our priority is certainly May 2012 executive orders. Over the past four years, the Murmansk Region has been one of the three leading regions in terms of complying with the May executive orders in the Northwestern Federal District. We will review the main results after the publication of the official statistics, but even now our estimates indicate that we have executed the May executive orders in full.

I would like to say a few words about salaries. In general, the private sector has seen an average salary increase of 5.5 percent to 47,390 rubles. In the public sector, the growth is somewhat lower: 4.2 percent, with average salaries at about 42,710 rubles. Generally, there is growth, but not in real terms, where it has even declined by 2 percent.

The situation on the labor market is stable. The official unemployment rate is 1.5 percent, or even lower than the same period last year.

According to the 2016 results (as tabulated by the Federal Government), the Murmansk Region has joined the top 20 regions with the best socioeconomic development results; we will even receive a bonus worth 218 million rubles from the Finance Ministry.

Of course, our main goal is to enhance the region’s investment appeal and improve the investment climate. We have created an investment support system in the region that is equally efficient in working with both major and small investors. As of today, we have signed twelve investment agreements on state support for strategic and priority projects (we have a classification for this). These investments will total over 90 billion rubles and more than 7,000 jobs will be created.

Let me list just a few projects. They include NOVATEK projects to establish a center for the construction of large-capacity offshore installations on the western coast of Kola Bay. After receiving an endorsement from the government expert review panel, the company will start on the project later this year. In 2017, as planned, we expect Rosneft to implement its projects to create an onshore support base for offshore projects. The total amount of investment for 2017–2030, as stated by Rosneft, is estimated at 120 billion rubles. NOVATEK’s investment will be some 25 billion rubles plus 3,000 new jobs. Of course, this is an important project for us.

As far as Rosneft projects are concerned, we, as per your executive order, have delineated the village of Roslyakovo, and Murmansk has annexed it. Now there are no obstacles to inviting foreign investors there.

The Kola Mining and Metallurgical Company (Norilsk Nickel) remains one of our major investors. They are implementing a number of investment projects and the total volume of investment amounts to over 20 billion rubles. The major projects include the creation of a cobalt and nickel electroextraction plant. The Kola Peninsula is now home to the world’s largest nickel refinery. Almost all nickel production plants have been transferred to the Kola Peninsula. Norilsk Nickel pays a great deal of attention to the environment. The company’s environmental footprint has been reduced, including a reduction in Sulphur dioxide emissions, which have been cut by more than a quarter, and a two-time reduction in carbon monoxide emissions.

A visitor center of the Pasvik nature reserve will open soon. This is an environmental project implemented by Norilsk Nickel. It will be a powerful international environmental platform for environmental education of the people of Russia, and the border areas of Norway and Finland.

Mr. President, I would like to take a moment to talk about the Year of the Environment. Your executive order announced 2017 the Year of the Environment, and I would like to tell you about a project that has been implemented on the Kola Peninsula. It took us 12 years to complete. I’m sure you are aware of it. This is what it looks like. (Watching a presentation.) This is probably one of the most important environmental projects associated with the elimination of the Soviet nuclear legacy.

Vladimir Putin:

Submarines.

Marina Kovtun:

Yes, the disposal of submarines. It was implemented by the Rosatom State Corporation in conjunction with their German colleagues. Germany alone has invested over 600 million euros at various phases of this project. An important nuclear waste management project has been implemented, and a lot of work has been done. I have already mentioned that the project was implemented over the course of 12 years. The main partners were the Russian Kurchatov Institute and the German Energiewerke Nord.

Here’s what we have accomplished. The place is called Sayda Bay. It is now completely environmentally safe. We have built the infrastructure for getting rid of nuclear submarines and introduced an effective nuclear waste management system. This is a major complex which can accommodate 155 reactor compartments from nuclear submarines. This project is unparalleled in terms of technology and safety.

Mr. President, I would like to take this opportunity to invite you to visit this unique facility. I think it's worthwhile, because, really, it's the work of an outstanding Russian-German team (it is not just an engineering team, but also a creative team), and, one must give credit where credit is due, this is a one-of-a-kind project, which resolves the issue of long-term nuclear waste storage, not only in northwestern Russia, but the entire Arctic as well.

Organization of events planned for Year of the Environment was the subject of discussion. Mr. Donskoy also briefed Vladimir Putin on work to update subsoil use licensing procedures.

President of Russia Vladimir Putin:

Mr. Donskoy, we have declared next year the Year of the Environment. This is to some extent just a convention, because we cannot devote attention to literature, culture, or the environment for just a year and then forget them. But this convention does give us the chance to focus our attention on the most serious issues and problems. How does your ministry, as the relevant body in this area, plan to organize this work?

Minister of Natural Resources and Environment Sergei Donskoy:

Mr. President, the Government already approved a program of activities for Year of the Environment in the first half of this year. The program includes around 600 events at various levels. We are in the process right now of preparing for these various events. We estimate the total budget for these events at around 350 billion rubles.

The bulk of these funds will come primarily from extra-budgetary sources, because the program includes work to modernize private companies too. The regions, together with investors, will promote initiatives to develop waste management systems. We moved the start of work to implement this reform back a little, but it will start next year and a number of regions are ready now and have already started implementation.

We also have the task next year of adopting the relevant Government decisions on establishing new protected nature reserves and national parks. The necessary preparation work for this was completed this year.

We will also be putting the focus next year on regenerating forests and on water purification.
Overall, the work program for the Year of the Environment is divided into eight main sections. They include Lake Baikal, major wildlife projects, returning animals to the wild, and regenerating populations of animals in danger of extinction. The project is ambitious in scale.
Over this time, in order to oversee this work’s implementation, we are signing agreements with the companies so as to have an effective supervisory tool for carrying out these activities and the companies’ plans next year.

Overall, we hope, of course, that everything we have planned for the Year of the Environment will be important and produce effective and large-scale results for all who have an interest in a clean environment and nature.

Vladimir Putin:

I don’t think there is anyone who doesn’t have an interest in this.

Sergei Donskoy:

Yes, that’s absolutely true.

Vladimir Putin:

Good. Is there anything else you wanted to say?

Sergei Donskoy:

Yes, I wanted to brief you on the work we are carrying out on your instruction concerning one-off updating of subsoil resource use licenses.

You gave the instruction in 2015 to carry out this one-off updating. The main task is to bring all licenses currently held by subsoil resource users in line with the laws in force.

Many of the licenses were issued back in 1992 and were not subsequently amended at all. By updating them now, we give them all a common form, for starts, and we are updating too the figures and information contained in the project documentation too. The licenses that have been updated all share a common form now, and the information that needs updating in the project documentation is updated. As at December 1, more than 4,000 licenses – 4,467, to be precise – had been updated, of which 84 percent were for hydrocarbons (2,380 licenses) and 2,087 licenses were for solid minerals. We have thus updated practically 100 percent of all licenses that needed updating.

Let me say that this one-off updating has enabled us to increase the number of obligations set out in the licenses. We have set out in the licenses project obligations for newly prepared projects. The number of obligations the licenses set out has increased by 25–30 percent.

We are seeing another trend too. Previously, subsoil resource users withheld geological information, seeing this as a commercial affair. We accord licenses and subsoil resource use rights to the subsoil resource users, but the resources themselves belong to the state, and so the state authorities should have access to this geological information too.

Companies all want to have their licenses updated, and so they tend to be more willing now to hand over the geological information because if they do not do this, if geological studies are not carried out, or if licenses have payment debts, we do not update the licenses. These were the conditions set in accordance with your instruction.

Overall, the licensing system is becoming more transparent and clear, and investors have an interest in having this kind of license. It is convenient for the state authorities too in terms of inspections and relations in general with the subsoil resource users. We think that the updating process has made it possible to stabilize to some extent the amount of geological investment over this period, taking into account the noticeable current global trend for a decrease in investment in geological exploration.

Let me note that over the last three years now, we have at the very least regeneration of hydrocarbon reserves. Currently, reserves have increased by 575 million tons.

Gas reserves have increased. With production at 572 billion cubic meters, natural gas reserves are expected to increase by 701 billion cubic meters. Coal reserves have also increased considerably, with an increment of 502,000 tons and production at 387,000 tons.

We have an increase in gold deposits of 1,194 tons, with production at 293 tons, in other words, substantially more than the production level. We have an increase in silver deposits of 5,818 tons, with production at 2,440 tons, essentially twice higher than the production volume.

In order to move over to more systematic work now, we are drafting a law on updating licenses. This will no longer be one-off process but a systematic one, setting a timetable for ongoing updating work and thus harmonizing the system of relations between the state authorities and investors.

Vladimir Putin:

Mr. Donskoy, this updating work has turned out essential, it seems. It amounts practically to renewing licenses.

Sergei Donskoy:

In some cases, licenses are subject to renewal, and in other cases we simply formalize obligations that were not in the license previously. In 1992, some licenses did not even contain obligations to carry out work.

Vladimir Putin:

Yes, this must all be brought up to date, and it is important that the subsoil resource users understand that this situation could not last indefinitely. If they obtained licenses, they need to work, invest the resources and organize production. If they are not doing this, unfortunately, we will need to revoke their licenses. I think that this will tighten discipline for those who choose to stay and genuinely work.

Sergei Donskoy:

Mr. President, let me add that we have already revoked more than 140 licenses during this updating process, precisely in cases where companies were not respecting the conditions and it was clear that no updating effort would be of help.

Plus, we have not updated all licenses in the situations I mentioned. In cases when work is not being carried out, for example, and when geological information is not handed over – and if work is not being carried out, then there is no way of handing over geological information. The same goes for cases where there are tax and payments debts, in this situation too we do not update the licenses.

This means that as the one-off updating effort ends now, those of our colleagues who did not get their licenses updated in time will work under a system in which [federal environmental regulator] Rosprirodnadzor will visit them and from there, if they do not take action to get work underway, then, as you say, their licenses will be automatically revoked.

Vladimir Putin chaired State Council meeting on environmental development of the Russian Federation in the interests of future generations at the Kremlin.

Excerpts from transcript of the State Council meeting.

President of Russia Vladimir Putin:

Colleagues, good afternoon,

Our agenda today includes the challenge of Russia’s gradual transition to a sustainable development model, not simply sustainable development, but environmentally sustainable development. I want to stress that we are discussing economic development, but with a focus on environmental issues.

This issue is crucial, above all, to improving the efficiency of the national economy, on the one hand, and at the same time to improving the quality of life for our people, and achieving the potential of our regions, on the other.

I will remind you that 2017 has been declared the Year of the Environment, and environmental protection has been included in the recently approved National Science and Technology Development Strategy as a priority.

It is clear that this policy is for the long term – for the next 20, 30 years or more. But, unless we start moving, we will go in circles forever complaining that we do not have enough money to address the current issues, and we will never get around to strategic issues. We cannot delay this any longer.

I also want to emphasize that Russia’s huge, no exaggeration, huge resource potential, is of truly planetary significance. Our country has huge reserves of fresh water and forests, and great biodiversity; it serves as an ecological donor for the world, providing it with nearly 10 percent of its biosphere sustainability.

Back in the early 20th century, Vladimir Vernadsky warned that the time would come when people would have to assume responsibility for human, as well as environmental development. There is no doubt that this time has come. Humanity already owes an enormous debt to the environment and continues to test its limits, which is affecting people. Although I would rather not speak about it, I feel compelled to say that outdoor and indoor air pollution claims the lives of 7 to 8 million people every year. These are ominous and alarming figures. This has a direct bearing on our country. In a number of areas, the environmental stress has reached a critical point. This costs our economy up to 6 percent of GDP every year, or up to 15 percent if we factor in the health costs.

I would like to highlight some of the most urgent environmental issues that need to be addressed as a matter of priority. Achieving drastic reductions in emissions of hazardous substances into the air, water and soil is a major issue. This can be done by reequipping industry and implementing the best available technology. A number of big corporations have already launched environment protection programs. However, we are also aware of the fact that not all companies pay due regard to these issues.

Of course, as I said in the beginning, this requires investment, but we have to understand that eco-friendly technology is not only a priority but also brings about tangible economic benefits. I expect the business community to heed my words: the implementation of this technology should not be delayed. We can no long afford to put these issues on the back burner. It was decided to roll back some initiatives, as I will explain later, but there will be no further adjustments. Let me add that implementing the best available technology can serve Russian companies and the economy in general as a powerful incentive for boosting performance and competitiveness.

I would like to call on the ministries and agencies in charge of issuing norms and regulations regarding such technology: you need to ensure that they are being issued in a timely manner and taking into account that companies need a reasonable timeframe for implementing them, which means that norms and regulations should be issued well in advance. Let me reiterate that it is impossible to keep putting this issue on the back burner.

The situation with hazardous emissions remains critical. Half of the city population breathes highly polluted air. Vehicles, both personal and public, contribute 50 to 90 percent. A significant part of open water is classified as polluted or extremely polluted. Seven percent of residents have no access to quality drinking water. Soil condition is worsening in nearly all regions. If we continue to limit the solution to half-measures and priorities other objectives, the emissions and greenhouse gases will reach a critical level by 2050. We understand very well what this means. This means that we will leave the future generations an environment unfit for living. Therefore, we must reduce pollution and emissions by at least 50 percent.

Environmental education and awareness is an important area for improvement. So far, the term “environmental education” has not been fixed by law. Environmental pollution data is scarce and disappears in various agencies while summary estimates of air pollution are calculated for major cities of only 12 Russian regions. These obstacles make the nationwide environmental monitoring difficult, to say nothing about long-term forecasts. I would like to hear today what you think should be done to change the situation.

Another important task is treatment of industrial and consumer waste, which now totals over 30 billion tons. Rubbish is disposed without any order and landfills take up almost 48,000 hectares. As you know, strict rules for the disposal and treatment of household waste have been introduced by law; however, the effective date has been postponed. I would like to hear about drafting of necessary documents and what has been done for the public to learn more about this innovation.

I would like the speakers to pay special attention to processing high-risk waste.

Furthermore, and this is always mentioned in various statements on this subject and in this year’s Address [to the Federal Assembly] too, individuals and public organizations should be actively involved in social projects, including the resolution of environmental issues. As I have said, officials should not hide from people in their offices. Obviously, the public wants and has the right to take part in environmental, educational and other specific actions aimed at improving the quality of their lives and upgrading their courtyards, parks and squares. I am simply convinced that confidence in public initiatives, as well as dialogue and partnership with public organizations are very important for developing a high-level environmental culture in the country.

I would like to ask Mr. Ivanov, chairman of the Organizing Committee for the Year of the Environment in Russia, to take responsibility for environmental projects with the participation of volunteers, including those from the Russian Geographical Society (RGS) and other associations.

Colleagues, I have mentioned only some of the many questions that require our attention. I believe they will be discussed in other reports and speeches. I am referring to such issues as energy saving, and the preservation of forests, water, unique natural sites and rare flora and fauna species. It is also necessary to carry out energy saving and ecological recovery programs at national sites like the Volga River, Lake Baikal, and Lake Teletskoye in Altai.

I would like to ask the speakers to focus on measures and proposals to improve the situation, which we can and must implement in the near future.

Mr. Dubrovsky, please.

Chelyabinsk Region Governor Boris Dubrovsky:

Mr. President, colleagues,

The central issue of the State Council meeting, Russia’s environmental development in the interests of future generations, has stirred great interest among scientists and experts, as well as a wide range of other professionals. In preparation for the report, we analyzed the impact of global environmental issues on Russia’s development and listed some domestic environmental challenges. The report justifies transition to eco-friendly sustainable development as a national strategic priority.

The wellbeing of the present and future generations can only be ensured by efficient use of natural resources. The idea itself is not new, as Mr. President noted in his speech, and originates from Russia. It was our great fellow countryman, scientist Vladimir Vernadsky, who introduced the term “sustainable development” almost one hundred years ago. The concept is clear and simple: humanity cannot exist in opposition to nature since it is an integral part of nature. We also have to honestly admit that neither today nor in the foreseeable future we will be able to do without natural resources. But we must clearly understand the ways to measure our natural capital. The entire world is looking for a new scale for these measurements. I believe Russia must get ahead of the rest of the world in this task.

Since Adam Smith, natural resources have been assessed in terms of their degree of involvement in economy. Even aware of environmental limits of growth, we continue to rate development levels through standard indicators. One of these key indicators is GDP growth, which basically only shows the rate at which natural capital is converted into physical capital, without consideration for the social and environmental impact. This impact can be negative. I think it would be appropriate to compare this to double-entry bookkeeping, which has been in use since the 15th century. We can apply it to our topic in the following way: humankind has natural capital, or liabilities, and human capital, or assets. Our goal is to turn liabilities into assets with minimal losses, that is, to use natural resources to increase human capital.

In our report, we have substantiated the need to add other quantitative indicators beside gross domestic product to reflect sustainable development. We will need to form a system of national accounts to evaluate the state of the environment and the cost of environmental benefits. This should be taken into account in strategic planning documents and should allow us to really manage the processes. We believe this planning system will enhance Russia's role in addressing global environmental issues, as you, Mr. President, said in your speech.

Colleagues, while working on the report, we found it useful to rise to the academic level, because large things are best seen from a distance. This has helped us to focus systematically on specific issues that are of concern to most people today, starting with the most relevant ones: the quality of air and drinking water, household waste disposal, mitigation of environmental damage, and preservation of the existing natural landscapes.

Article 42 of the Russian Constitution enshrines the right to a healthy environment, reliable information about its condition, and compensation for the damage done to one’s health or property by environmental violations.

As we see it, there are three main components, and each requires hard work. The authors of the report have proposed a package of solutions for attaining this complex goal in the medium and long term. It includes amendments to existing legislation regulating natural resources and environmental protection; a multi-level system of incentives; building clean industry – also through using special marketing tools; a set of measures for the development of renewable energy sources; new requirements for environmental education; and effective mechanisms for interacting with civil society. The proposals include large-scale and largely interrelated efforts, which cannot fit in the so-called simple solutions.

The algorithm of implementing the suggested measures has been presented in detail in the report. I will briefly touch on the key issues.

First is the need to control air quality. No tangible reduction in air pollution in industrial cities has been recorded since 2000. This indicates that we have exhausted the potential of the current model of controlling ambient air and must look for other approaches.

Such tools exist and here they are. It has been suggested that we need to estimate the combined influence of all pollutants in a city, conduct a summary assessment of maximum acceptable emissions and, based on this, determine the allowable contribution of each pollutant in the standard quality of air in a given residential area. Companies will proceed from this contribution or quota in drafting specific programs and making technical solutions. The goal is to reduce the rates of air pollution in the cities.

It is also necessary to determine traffic quotas at the same time. Municipal and regional authorities will be responsible for tracking this. They need to determine the tools to influence this, including, first of all, ways to develop public transport, transition to environmentally safe vehicles, and modern city-planning solutions for regulating traffic.

It is easy to determine the efficiency of such air control methods by measuring the reduction in the concentration of harmful substances in the air in residential neighborhoods. The existing Roshydromet (Federal Service for Hydrometeorology and Environmental Monitoring) and Rospotrebnadzor (Federal Service for Surveillance on Consumer Rights Protection and Human Wellbeing) monitoring systems will provide the necessary data for managerial decisions. The extent of meeting the public demand for fresh air will be the main indicator of the efficiency of these joint efforts and hence, may be considered a sign of steady development.

The report suggests using all these tools. I will list them again: combined pollution assessment, pollutant concentration quotas, and monitoring of air in residential neighborhoods as the foundation for managerial decisions on legislative and regulatory acts. This will allow us to face the authorities and industrial enterprises with very practical objectives. I suggest choosing pilot regions for testing these measures and will say outright that the Chelyabinsk Region is ready to pioneer this. We hope this will give new impetus to our development.

In our experience, we often come across growing public and environmental risks as part of major investment projects. We believe a complex environmental impact estimate for such projects at the initial stage of their implementation would allow us to balance business and public interests. Clear and transparent mechanisms of state environmental review should make the process easier.

The next problem is the shrinking land that is supposed to provide for the needs of the current and future generations. Already a third of the planet’s fertile soil has been lost. In Russia its share is 7 percent. But we all realize that this is not an excuse for remaining idle. The process of soil loss is accelerating, and an increasing amount of land is being used for non-cultivating purposes, for manufacturing but also industrial waste and dumping.

As you said, Mr. President, the uncontrolled use of (1st and 2nd class) hazardous waste, which can be tantamount to chemical weapons, is particularly alarming. Its disposal should be regulated by special human safety requirements and for preventing possible terrorist threats. We believe high-tech transport control mechanisms and the best recycling technologies should be introduced in this area as a priority. I hope Mr. Donskoy will highlight this subject in more detail.

Let me touch upon household waste briefly, as it cannot be put off any longer. The regions are prepared for the new waste disposal system to various degrees.

The regions are facing this problem to different extents. The adopted decision to let the regional authorities decide on when to introduce the new system within a certain transition period meets the interests of the green economy and is fairly realistic. People must be prepared to use this system, and it is up to the local authorities to get them ready.

Another extremely important issue, in our opinion, is environmental education. It is important to build a firm attitude to nature in every Russian citizen so that the public understands how their everyday behavior can affect the environment. Insufficient environmental literacy, inability to give an objective assessment to relevant information facilitates environmental skepticism and, therefore, denial of any progress. We have seen that. When this happens, many of our fellow citizens lose the ability to judge environmentally significant data from various sources.

Environment is, above all, knowledge. We believe that our education system must provide this knowledge as a fundamental rather than secondary subject. Environmentally friendly behavior must be instilled by all education programs, starting from kindergarten. Only then will it be common to realize one’s personal responsibility for the future where humankind, which has become a geological force, can continue to progress with confidence.

Colleagues, in my speech I briefly and sometimes emotionally outlined the results of the six months of work. I hope that my team managed to articulate the principles that will help us ensure the sustainable development of Russia for the benefit of present and future generations. In this regard, I cannot help but quote Vladimir Vernadsky who, almost a hundred years ago when people only started paying the price for industrialization, wrote: “A tremendous future is unfolding for humanity if people can understand that and do not use their intelligence and labor for self-eradication.”

I sincerely hope that we will enter the Year of the Environment with a common understanding of the tasks and approaches to them in order to accomplish our goals together.

In conclusion, I would like to thank all the working group members for their contribution here. And Happy New Year! I wish you good health, prosperity and peace!

Thank you very much.

Vladimir Putin:

I would like to begin with the results of a recent nationwide poll conducted by VCIOM Public Opinion Research Centre, in which almost 45 percent of respondents believe that waste is a major threat to the environment, so I'll start with that.

Two years ago, a law aimed at resolving this issue was passed. It provides several key mechanisms. The first is requiring each region to create a transparent system for solid municipal waste management. To this end, the regions need to approve territorial waste treatment arrangements. This document provides a method for the objective assessment of the accumulated amounts of waste and waste traffic management. Under the law, the regional authorities have to select a regional operator on a competitive basis.

We realize that the regions are in varying degrees of readiness, and their transition to a new system is only possible with the full support of the federal government. As an example, I will cite the preparatory process for regional territorial plans. These documents have been agreed upon with Rosprirodnadzor [Federal Service for Supervision of Natural Resources] in 82 regions, and 69 have approved them. These results are due to the fact that Rosprirodnadzor has been working with each region individually literally on a daily basis.

The next step includes choosing regional operators and setting rates. The regions should do this with the targeted support and control of our colleagues from the relevant federal agencies and ministries.

It was decided to move to a new regulatory system in phases, but, of course, we are not putting this issue on the back burner. First, 12 regions have confirmed their willingness to work under a new system of regulations beginning in 2017, and they need our support. The second key mechanism of the adopted law has become operational in full. Today, manufacturers and importers must dispose of the items that have lost their consumer properties on their own, or pay an environmental fee to the state. In 2017, we plan to collect over 6 billion rubles in environmental fees, and these funds will be used as subsidies for the pilot regions.

We also plan to gradually enlarge the categories of goods subject to recycling (at present there are only eight) and set higher recycling standards. This will generate considerable amounts of money: 300 billion rubles. These funds will be used to subsidies household solid waste disposal programs at the regional level.

Obviously, these measures will be successful only if the required waste processing facilities are created. The first step in this direction will be the launch next year of five pilot recycling plant construction projects. In order to make waste recycling environmentally friendly, it is necessary to ensure waste separation and sorting, and we believe that this is an area that small and medium-sized businesses should move into.

Unfortunately, at present, in addition to reforming the waste disposal management system, we have to deal with the backlog of problems in this area. To bar illegal waste disposal practices, we have streamlined the licensing system down the entire waste circulation chain. A total of 12,000 licenses have been issued and license oversight is ensured. There are also plans to introduce additional automated waste transport control systems regardless of hazard categories, including the use of the GLONASS system. Together with NGOs, in 2017, we will put into operation a public information system to identify and monitor the elimination of dumpsites – a kind of public control system.

Now regarding accumulated industrial waste. Over the past four years, we have removed 4 million tons of waste in Russia’s Arctic zone, Siberia, Far East, Caucasus and Volga region, as well as the Baikal nature reserve. However, we understand that considering its scale, the problem requires a systemic solution. We have adopted a corresponding law that provides for the introduction of a new system: the identification of such sites and their categorization in terms of environmental risk. As a result, next year we will expand the scope of operations, with another 25 polluted territories in 20 regions slated for clean-up.

The aggregate volume of budgetary funding for these projects will exceed 7 billion rubles through 2019. However, budgetary funds alone are not enough. It is necessary to incentivize private investors to undertake such projects. This may include exemptions in providing tracts of land cleared of dumpsites and landfills, as well as the implementation of such projects in lieu of reimbursing the damage caused to the environment.

We believe that the implementation of all of the aforementioned measures will make it possible to significantly improve recycling standards. At present, the level of solid household waste recycling is 8 percent. By 2025, it will amount to 40 percent. Naturally, this will also prevent illegal dumps from popping up.

I am now moving to the second area of the environmental protection reform, namely technological regulation through the law on the best available technology. This is a comprehensive law aimed at improving environmental oversight and control, ecological assessment and ecological norm setting and encouraging environmental activities. Each of those elements is to be implemented stage by stage over a period from 2015 to 2025 with the planning horizon stretching as far as 2035.

For the implementation of the first, the most crucial stage, it is necessary to single out 300 enterprises in the first environmental risk category, which account for up to 60 percent of the negative impact on environmental components. Those enterprises will have three years, beginning in 2018, to carry out modernization programs. The remaining facilities in the first environmental risk category are to switch to the new system by 2025. For that, a state database of enterprises is being created. Those of them that pose the highest risk in terms of pollution are being singled out and equipped with automated control. A system of ecological assessment for the construction and reconstruction of such facilities is also being introduced. As a result, data on overall emissions, waste dumping and waste disposal volumes will be available to the general public.

In 2017, to ensure a transition to the best available technology, all necessary reference books for various economic branches will be completed. By now, half of such reference books have been approved. There are 24 reference books.

To make those measures more efficient and simpler to implement, we consider it necessary to envisage equipping enterprises stage by stage with automated emission control devices and issue comprehensive ecological permissions for new enterprises prior to their construction. And we suggest moving the state environmental review of investment projects to the stage at which locations for future industrial enterprises are chosen.

At the same time, we are aware of the fact that the implementation of this large-scale task will require considerable investments – around 1.5 percent of the GDP according to preliminary estimates. Therefore, the law envisages various privileges and economic incentives. In addition, the Russian Foundation for Technological Development will allocate funds from the federal budget to support the development of enterprises introducing the best available technology. For enterprises that fail to introduce the best available technology, the fee for emissions and waste dumping exceeding the required norms will be increased fourfold.

The efficiency of this mechanism has been proven within the framework of the experience introduced in 2013 of regulating responsibility for burning petroleum gas at flare facilities. The use of this mechanism has made it possible to raise petroleum gas recycling from 77 percent in 2012 to 90 percent this year. Total investments exceed 200 billion rubles.

I would like to point out that, despite the fact that the core mechanisms for implementing the best practices will become effective only in 2019, many large enterprises are already involved in this work. In particular, together with Rosprirodnadzor, we signed 55 agreements with the companies, and the expected volume of environmental investments will exceed 130 billion rubles.

In addition, for the purposes of sewage water treatment, the Ministry provides support for implementing 59 investment projects to build and upgrade sewage treatment plants, with a total private investment of over 125 billion rubles. Once completed, the volume of polluted wastewater discharged into water bodies will decrease by almost 2 cubic kilometers per year.

Over the long term, the transition to the best practices will ensure not only an increase in the quality of life, but will also stimulate the machine-building industry to manufacture the latest equipment, and set the vector for import replacement and localization of manufacturing facilities, which will ultimately improve the competitiveness of the Russian economy.

Now, with regard to the conservation of nature sites. The system of protected areas and biodiversity conservation are the most effective means of wildlife conservation for future generations. So, our primary goal here is to expand the area of protected nature sites, taking into account the level of social and economic development of the regions where they are located. Over the past four years, we have increased the area of ​​protected areas by 14 percent to over 62 million hectares. We will not stop at that, and plan to create 10 more protected sites next year.

In today's world, specially protected nature sites are actively becoming incorporated into ecotourism. Potentially, our parks and reserves can handle about 20 million visitors a year, but the current infrastructure limits this number to 2 million. The state funds are not enough to create the necessary infrastructure, so next year we propose introducing a mechanism to attract private funds to create such infrastructure, including through concession agreements. These mechanisms will allow us to start implementing pilot projects to promote ecotourism in the Baikal nature area, the Altai Mountains and the Caucasus in 2018, and to triple the number of tourists to our national parks by 2025.

Targeted programs are being implemented with regard to all endangered species, such as the Amur tiger, the Persian and Far Eastern leopard, polar bears, bison, and Przewalski's horse, in order to stabilize and increase their population. We plan to launch more rare animal programs, in particular, for the argali, snow leopard and saiga antelope. Next year, we will, of course, continue to work towards expanding the list of such programs, including those with the participation of businesses.

In closing, I would like to provide one more result from the VCIOM poll, which I began with. Responding to a question about the factors positively influencing the environment, our citizens put state environmental supervision in the first place, followed by punishing violators of environmental legislation. Since the majority of regional leaders are present here today, I want to ask you, especially considering our plans for the Year of the Environment, to be responsive to the public request and proceed from the inevitability of punishment for violations of environmental law. I would ask you to consider our plans for the Year of the Environment specifically in this manner.

Thank you.

<…>

Vladimir Putin:

In closing, I would like to say the following.

The subject that we are discussing today is not simply politically expedient and fashionable. It is truly extremely important, both for people’s health and the nation’s economic development.

Yes, investing in modern equipment that ensures high environmental standards always means a lot of spending at the initial stage, but you know well that the introduction of environmentally clean modern equipment should eventually enhance labor productivity, because this is modern high-tech equipment, and this represents the main trends in the development of our industry and economy.

In this context I would like to note the responsibility of the state and the business community. It would be wrong if the decisions required for moving down the road we are discussing today depended on people who drink clean water and live in a good environment, while large teams of workers and everything around them exists and moves around in terrible ecological conditions. This is absolutely inadmissible. I would like to draw the attention of representatives of the business community, as well as regional and federal authorities to this fact.

Needless to say, we should act with extreme caution so as not to destroy the economy, not to act like an elephant in a china shop, not to demand the impossible. All decisions must be thoroughly considered and adopted in a timely matter. We must move along this road not in fits and starts, but steadily. If we do not do this, we will get what I mentioned at the beginning of my opening remarks: by the 2050 we will have to deal with consequences that will be hard or impossible in some places to reverse.

I would like to motivate you and all of us to take part in this joint work that is extremely important for our country. Thank you very much for attending today’s meeting. I am grateful for the efforts of the working group to prepare it.

Putin.BLOG – PHOTO:

Tula Region Governor Alexei Dyumin (left) and Presidential Plenipotentiary Envoy to the North Caucasus Federal District Oleg Belaventsev before a State Council meeting on Russia’s environmental development for future generations.

Moscow Region Governor Andrei Vorobyov at a State Council meeting on Russia’s environmental development for future generations.

Chief of Staff of the Presidential Executive Office Anton Vaino and Federation Council Speaker Valentina Matviyenko at a State Council meeting on Russia’s environmental development for future generations.

Presidential Aide Igor Levitin, State Duma Speaker Vyacheslav Volodin and Transport Minister Maxim Sokolov before a State Council meeting on Russia’s environmental development for future generations.

Before a State Council meeting on Russia’s environmental development for future generations.

Before a State Council meeting on Russia’s environmental development for future generations.

State Council meeting on Russia’s environmental development for future generations.

Special Presidential Representative for Environmental Protection, Ecology and Transport Sergei Ivanov at a State Council meeting on Russia’s environmental development for future generations.

State Council meeting on Russia’s environmental development for future generations.

State Council meeting on Russia’s environmental development for future generations.

State Council meeting on Russia’s environmental development for future generations.

Putin at State Council meeting on Russia’s environmental development for future generations.

Liberal Democratic Party leader Vladimir Zhirinovsky (left) and Communist Party leader Gennady Zyuganov at a State Council meeting on Russia’s environmental development for future generations.

Deputy Prime Minister and Presidential Plenipotentiary Envoy to the Far Eastern Federal District Yury Trutnev at a State Council meeting on Russia’s environmental development for future generations.